Strategy Faces Multiple Class Actions Over Bitcoin Losses, Lawyers Say It’s Normal

The world’s largest Bitcoin holding company, Strategy (formerly MicroStrategy), is facing at least five class action lawsuits from different law firms. The suits allege that the company and its executives made false and misleading statements about its Bitcoin investment strategy, leading to nearly $6 billion in unrealized losses in the first quarter of 2025.

However, multiple law firms filing similar lawsuits is common in large securities cases, according to legal experts. Their goal is to become lead plaintiffs, which would help them control the case and collect the bulk of their attorneys’ fees if the case is successful. This is especially important in class action lawsuits involving large companies like Strategy, where potential financial damages and settlements could run into the tens of millions of dollars.

The lawsuits stem from Strategy’s massive Bitcoin buying spree in Q1 2025, when the company spent more than $7.7 billion to buy 528,185 BTC at an average price of $95,000 per coin. But by the time it released its quarterly financial report, the price of BTC had fallen to around $82,000, leaving Strategy with an unrealized loss of nearly $6 billion, a figure that shocked the market.

After Strategy warned of a possible first-quarter loss and reported a net loss of $16.49 per share, the lawsuits quickly began. The first lawsuit was filed on May 16 by Pomerantz LLP, followed by other law firms including Gross Law Firm, Bronstein Gewirtz & Grossman, Kessler Topaz Meltzer & Check, and Levi & Korsinsky.

These law firms are all vying to be the lead representative in the class action, because the person in this role will have a say in the legal strategy and will collect the bulk of the fees, according to University of Michigan attorney Adam Pritchard. To be appointed by the court, the firms need to prove that their plaintiffs have suffered the greatest financial loss and are willing to represent the entire group of investors.

University of Colorado attorney Ann Lipton said that financial institutions or investment funds, which are often the largest shareholders, will be favored because they have better oversight over the lawsuit and the lawyers.

It is unclear whether large institutional investors such as Vanguard (which owns 8.55% of shares), BlackRock, Capital International Investors, Susquehanna Securities or Jane Street will participate in these lawsuits. Meanwhile, founder Michael Saylor remains the largest shareholder with nearly 20 million shares of MSTR worth nearly $7.8 billion at the current share price.

While Strategy has not yet made an official comment, the company has acknowledged the existence of the lawsuits in a filing with the U.S. Securities and Exchange Commission (SEC). In its 8-K, Strategy said: “We intend to vigorously defend ourselves against these allegations. At this time, we are unable to predict the outcome or provide any reasonable estimates of the financial impact of the case.”

What has angered many investors is that Strategy, as a publicly traded company, has been accused of not being transparent about the financial risks of its continued purchases of BTC amid a volatile market. According to the lawsuit, Strategy misled investors into believing that its investment strategy guaranteed long-term returns, when in fact the volatility risk was significant and not clearly presented.

Law professors agree that the event is a prime example of the legal process that occurs when a large company experiences severe financial turmoil. Particularly in the cryptocurrency space, where asset values can change rapidly and current laws are still catching up, legal disputes can drag on for years.

With its current BTC holdings of more than 592,000 units worth around $63 billion at the latest market price, Strategy remains the world’s largest Bitcoin holder. But while digital assets are on the rise again, legal implications and scrutiny from shareholders, media and regulators will continue to be a challenge for the company in the coming period.

The lawsuits also serve as a warning to listed companies when choosing to invest in digital assets: transparency, clear risk assessments and honest communication are vital to maintaining investor confidence and avoiding a spiral of protracted litigation.